Texas Startup Communities Expanding, Accelerating Into a Whole

Xconomy Texas — 

The state of Startup Texas is in a fever of activity.

In the last week and through mid-September, half a dozen accelerators have either announced new classes of entrepreneurs or are hosting their pitch days as the newly fledged startups seek funding and customers. Half of the programs did not exist just a year ago.

I wondered what might be driving the noticeable uptick in the various organizations aimed at boosting Texas startups. Interviews with a group of entrepreneurs and investors didn’t yield any one reason; they all agreed that a variety of factors such as migration from other startup hubs is helping create a groundswell of activity. (And similar growth seems to be happening around the country in places like Colorado, Wisconsin, and North Carolina.)

“I think it’s a combination of people like myself, in their 30s and 40s, who have had success and see what has worked and what hasn’t,” says Blair Garrou, an Xconomist and co-founder and managing director of Mercury Fund, a Houston-based venture capital firm. “So, in Houston we wonder why aren’t there more resources so that entrepreneurs can build what’s needed?”

“There are a number of people who are coming to Houston and leaving corporate jobs wanting to start their own companies and looking for resources to do that,” he adds. “If the help isn’t there, they build it themselves.”

I could see that, in part, when I attended demo days for two new Houston organizations—Houston Health Ventures and The Ironyard. Held at Start Houston, itself a relative newcomer to the startup scene, the pitches offered a peek at perhaps the earliest stage of local entrepreneurs’ ideas.

Those demo days were exactly the sort of activity planned by Apurva Sanghavi and Gaurav Khandelwal when they founded Start Houston as a co-working space two years ago. “I want to put Houston on the map for technology startups,” Khandelwal told me last year.

David Franklin, who founded Houston Health Ventures as a health IT accelerator this summer, moved to Houston from southern California, where he had been an angel investor in medical startups. “In my personal case, I’m pooling learning from the West Coast with seeing the opportunities in Houston. It’s crazy to think we have the world’s largest medical center … and we see a little bit of a void in the health IT and medical investing space.”

Franklin, along with two Houston entrepreneurs, in May also founded a venture fund that will invest in IT startups and created the Texas Collegiate Regional Center at the University of Houston.

Meanwhile, Greenville, SC-based coding school The Ironyard graduated its first set of Houston students who pitched Web-based projects such as an invoice-and-billing management tool for hourly employees and an e-retail site for exotic jewelry. The next Google? Likely not, but a solid step in building a foundation that nurtures entrepreneurial efforts, say Sanghavi and others.

Up the road north of Houston in College Station, TX, a new accelerator called Seed Sumo made its debut last week. Bryan Bulte and his three co-founders are from Austin and thought about setting up their accelerator in the Texas capital. But they saw a market gap in College Station, which is also home to Texas A&M University. “There’s just really nothing here,” he says. “There’s a great university here; we’re in a brand-new building. It made sense to leverage that and to leverage our network here.”

Out-of-state accelerators see the opportunity in Texas as well. The biggest and most well-known of this group is Boulder, CO-based Techstars. Its Austin hub, which was established last year, recently hosted startups for a second annual pitch day. Among the startup ideas that made their debut: software for making tax filing easier, a beer-brewing robot, and a discount broker for freight shipping.

Along with private-sector endeavors, state universities have stepped up efforts to engage with startup communities at large. The University of Houston’s RedLabs and OwlSpark at Rice University held a joint demo day this year and also shared mentoring sessions for the student entrepreneurs. And on Wednesday, the Austin Technology Incubator at the University of Texas will live-stream the demo day for its Student Entrepreneur Acceleration and Launch program.

All in all, Garrou says, the Texas activity is following what’s happening nationally, especially when it comes to sector-focused accelerators, like Surge, an energy IT accelerator founded three years ago by Xconomist Kirk Coburn. Since then, Texas has seen the formation of a number of so-called niche from Incubation Station, which is focused on consumer-products startups, to Health Wildcatters in Dallas.

What’s more, the Texas Medical Center is in the planning stages of setting up what’s likely to be a medtech accelerator as part of its innovation center.

“This is a continuation of the work that people have already done before we started,” says Franklin of Houston Health Ventures. “These groups were attacking different pieces and components of it. We’re getting to the point where all those pieces and parts are starting to add up.”